I have a Simplicity card I opened in January for its BT promo. I've basically just been making minimum payments on it since then, while working on paying down my other higher-interest cards. The card itself sits in my safe, and I've literally never charged anything to it the whole time I've had it, all I do is pay down the balance on it little by little each month.
My question is, am I risking Adverse Action by not having any activity on the card besides just the balance that I'm making payments on? Should I be using the card for purchases once in a while to maintain activity on it to reduce the risk of AA? Or is it sufficient to just be carrying a balance and making timely payments on that each month?
Total Loan Balance: $43k / $65k
Total SL: $78k
Monthly payments on a card is in itself considered as "activity". However for purposes of avoiding AA, make sure you also look at your overall credit profile as they also SP you monthly. You can still get an AA from them despite your perfect payments if their risk assessment algorithm flags you.
@JR_TX wrote:Monthly payments on a card is in itself considered as "activity". However for purposes of avoiding AA, make sure you also look at your overall credit profile as they also SP you monthly. You can still get an AA from them despite your perfect payments if their risk assessment algorithm flags you.
Good to know, thank you. I think my credit profile should be fine, it's better now than it was when they approved me originally, but I'll make sure to keep it that way!
I can tell you that I have two Citi cards (Double Cash and Citi Mastercard) and from all lenders, they have been the most "annoying" one to deal with. For a long time, I just made minimum payments, and on both cards they lowered the credit limit at some point. They also often locked the card after a while of inactivity. I would not use it for like 3 months and the next time I would use it, it would be declined (despite being in good standing). I had to call a few times to unlock it.
I barely use the cards now, I may actually close them out at some point.
Maybe I'll put a small monthly bill on it just to be on the safe side, like Hulu or something.
I'm also going to adjust my autopay to roughly 2x the minimum payment just so it doesn't look like I'm struggling to make payments.
@Anonymous wrote:I assume your BT offer is low interest or 0% interest. I would not make any purchases on that card as you will be charged full interest on those charges until the card is paid off. But given your scores, you'll need to show you are actively working to pay down your balance without running up higher balances on other cards.
Correct, 0% interest for 14 more months. There's also a promo 0% purchase APR until next spring. I believe a small purchase of ~$10/mo wouldn't be much issue since I've now adjusted my autopayments to pay roughly 2x the minimum payment, so the overage would automatically go towards balances with higher than 0% APRs.
Definitely will work more aggressively towards paying it down, I had only been making minimum payments up til now so that I could focus on paying off other cards, but I'm going to start putting some extra towards this balance as well.